Avation Share Discussion Threads

[x54v] 10/7/2017 12:05

Just been tipped as a strong buy by Simon Thompson in the IC:

[broadwood] 30/6/2017 13:29

- Commercial passenger aircraft leasing company Avation announced on Friday that, further to its announcement on 24 April, the sale of six aircraft pursuant to sale and purchase agreements with Chorus Aviation Capital Corporation and its subsidiaries had now been satisfactorily completed.
The London-listed firm said the sale of the aircraft released approximately $31m in net proceeds to the company after costs and associated debt repayments.

It said it would consider the redeployment of the proceeds through the acquisition of additional aircraft in order to "further diversify" Avation's portfolio.

The sale consisted of six ATR 72-600 turboprop aircraft, with three currently on lease to UK airline Flybe and three on lease to Virgin Australia Airlines.

"The addition of ATRs to our leased fleet adds a further element of diversification to our business," said Chorus president and CEO Joe Randell.

"Through Chorus Aviation Capital, we are not only diversifying our customer base and geographic footprint, but also the aircraft types we can offer the market as we pursue our vision of delivering regional aviation to the world

[sogoesit] 30/6/2017 10:11

Big dividend increase too; on the way to an "Income" stock.

[catsick] 30/6/2017 09:19

Nice update , all seems to be going very well indeed ....

[catsick] 02/6/2017 16:57

It was the fact that it looked like the entire funding was for just one aircraft that made me think it could be Aseman in Iran who have been leasing some airbus jets and have some atrs , it sounds like the Irish leasing companies have been working with them already so maybe the situation with them is becoming normal now, either way Iran are taking down a huge number of smaller jets and turboprops, 100's in total which should keep the market for them very tight .

[carcosa] 02/6/2017 11:25

The reason why Iran is less desirable is because they are not signatories to the Cape Town Treaty whereas those other countries you mention are.

If you are correct in your earlier post then the entire funding would probably have to be sourced from AVAP only (GMTNs) and hence higher margins are likely. However the downside would be a possible lower credit rating from the agencies.

[catsick] 02/6/2017 11:11

I personally would not think of iran as any worse a jurisdiction than india vietnam or even the US where there is more likelihood of legal issues and shakedowns ....

[buffetteer] 02/6/2017 09:39

I agree with carcasa .avap will only lease to those where the law gives avap sufficient confidence to retrieve their plane in the case of lessor default . That counts out many corrupt countries .

[catsick] 02/6/2017 01:02

I wonder what ever happened to russman ? He must be very depressed that he refused to accept the takeout of cla in nov 15 and roll the profits into avap at 130 which was the sensible thing to do, instead he refused to sell and enjoyed being mean about jeff and missed the great compounding going on here ......

[catsick] 02/6/2017 00:46

Interesting to see this new tap of the bond issue, good to see they are no longer sat on an excess of expensive cash, This bond can be called next year, as it is above par now I think they will call and issue a new one with a lower coupon at that point. As it seems this new plane is being purchased for all cash ( the atr are about 20m each ) I am guessing it is for Iran as it would be harder to get a secured loan on a plane going there, I am guessing the iranians will be paying up to sign these leases so there will be good margin on the deal ...

[ragehammer] 01/6/2017 10:57

Bangkok Airways, Cebu Pacific and Wings Abadi ATRs have all been delivered.

Trujet have one delivery remaining and it is leased from Dae Capital.

It could be Malindo Air.

[carcosa] 01/6/2017 10:47

Other Asian operators taking delivery around the same time are:
Malindo Airways
Bangkok Airways
Cebu Pacific
Trujet
Lion Air/Wings Abadi

I very much doubt Avation will touch the Iranian Air business

[ragehammer] 01/6/2017 10:32

Issuing $20m of new bonds (same terms as the existing $100m issue) and purchasing a new ATR72 in June for lease to a new customer in July. They don't name the new customer but Jeff's comments about Asia suggest it could be either Indigo (Indian airline which recently ordered 50x ATR 72's) or Iran maybe? I don't believe that Indigo are getting their ATR's until "end of 2017" so this could well be Iran Air.

[sogoesit] 23/5/2017 16:47

Here's the excerpt from "Five Small Cap Buys" today:

"Primed for ascent

I feel investors are missing a trick with aircraft leasing company Avation (AVAP:203p). The company has just signed a term sheet to supply 50 ATR 72-600 aircraft to Indian budget airline Indigo. That’s interesting because analyst John Cummins at brokerage WH Ireland notes that “Indigo plans to introduce up to 20 aircraft by the end of 2018, taking further available capacity out of the ATR supply chain over the next couple of years. This follows on from last month’s announcement that ATR and Iran Air have signed contracts for 20 ATR 72-600 aircraft orders plus a further 20 options”.

A backdrop of rising demand and relatively fixed supply is positive for Avation which has firm orders for nine ATR 72-600 aircraft and a further 27 options, making it the largest holder of ATR 72-600 options globally. In the past, the company has either taken up the orders or traded them at a profit when market conditions have allowed. And the board is freeing up capital to fund new aircraft by selling off six of its existing leased ATR 72 aircraft to a single commercial lessor, Chorus Aviation Inc. (TSX: CHR), in a transaction at a premium to book value and one which will release $31m (£23.8m) in net cash proceeds. Mr Cummins notes that “the disposal provides the opportunity to deliver additional scale of fleet assets and diversification, both of which drive improved credit ratings and ultimately reduce the cost of funds, which represents the largest cost to a lessor”.

The point being that this is not being priced in. That’s because Avation’s shares are trading 15 per cent below last reported net asset value per share of 310¢, or 238p at current exchange rates, and that’s before factoring in the premium valuation being achieved on the aforementioned disposal which should close by end June. To put this into some perspective, the international aircraft leasing peer group is rated in-line with book value. Also, Mr Cummins is pencilling in an 18 per cent rise in pre-tax profit to $21.5m in the 12 months to end June 2017 to produce EPS of 32.6¢, or 25.7p based on an average exchange rate of £1:US$1.27, implying the shares are rated on a forward PE ratio of 8, a deep discount to rivals. Shareholders can expect a decent full-year dividend after banking a payout per share of 3.25¢ last year.

So, having last advised buying the shares at 220p ('Four small-cap buys', 21 March 2017), I feel Avation’s shares are primed to take out the 229p record high, the catalyst being the closure of the Chorus deal and the release of a bumper set of full-year results. Offering 23 per cent upside to my price target of 250p, I rate the shares a buy."

I don't know why he refers to "release of a bumper set of full-year results" now...
The end year for AVAP is 30 June and they report around September time.

[sogoesit] 23/5/2017 16:45

Now puked up...
Simon Thompson from the Chronic I says buy for an upside to 250p in an article today.
Will try to copy it online and post.

[jamesjoel] 28/4/2017 14:49

No mate a buying opportunity

[catsick] 28/4/2017 13:47

Any idea what just caused the puke out to 190 ??

[harrogate] 25/4/2017 09:06

Thanks Guys - that RNS didn't show anywhere so grateful for letting me know. Carcosa - thanks for link. Interesting comments and I agree we need to see how they use the funds in the short term - would be good to get a couple of new aircraft in before end of June so we have a full year of lease revenue from them. I am looking to top up I think if it drifts further on the back of the ATR Iran deal showing that market improving, better credit rating due to customer spread and stated intention to increase fleet in jets. Thanks again

[carcosa] 25/4/2017 07:56

RH Correct. Although yet to have confirmation of the MSR's it's good enough to take a stab at the premium which I did, here:

[ragehammer] 25/4/2017 07:10

If you read down to Chorus' announcement you will also see that three aircraft are with Flybe and three with Virgin Australia. In the latter case this represents a further reduction in reliance on Virgin as a customer.

[carcosa] 25/4/2017 06:20

The deal was announced weeks ago. Yesterdays RNS was just an update although it did confirm which lessee's the aircraft are along with the aircraft age which allows for an educated guess as the premium they obtained.

[mfhmfh] 24/4/2017 18:35

good deal announced today? anyone have any views?

[harrogate] 27/3/2017 10:03

Surely we want people putting their money where their mouth is in general anyway

[x54v] 27/3/2017 09:57

I imagine most people will tip or comment positively on shares they own rather than ones they have no interest in.

[pj 1] 27/3/2017 08:43

He tipped it last year as well. Maybe he should tip shares he doesn't own?